The distributions are different for IRAs, qualified plans and 403(b) plans.

For IRAs, qualified plans (such as 401(k), money purchase and profit sharing plan), and 403(b) plans, distributions that occur before the participant reaches age 59.5 are subject to the 10% excise tax (early-distribution penalty) unless the participant meets an exception. The lists of exceptions for each of the different plans share some similarities, but there are some differences as well.

Distributions from IRAs are left to the discretion of the IRA owner and can occur at any time. For qualified plans and 403(b) plans, the participant must meet at least one of a list of requirements before he/she can receive distributions from the plan.

For the list of exceptions for IRA distributions, see our IRA tutorial. Also see our tutorials on qualified plans and on 403(b) plans - each one devotes an entire section to distributions.

This question was answered by Denise Appleby
Contact Denise)

  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. Why is the Cayman Islands considered a tax haven?

    The Cayman Islands is one of the most well-known tax havens in the world. Unlike most countries, the Cayman Islands does ... Read Full Answer >>
  3. Why is Luxembourg considered a tax haven?

    Luxembourg has been the tax haven of choice for many corporations and mega-rich individuals around the world since the 197 ... Read Full Answer >>
  4. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>
  5. What are the risks of rolling my 401(k) into an annuity?

    Though the appeal of having guaranteed income after retirement is undeniable, there are actually a number of risks to consider ... Read Full Answer >>
  6. Why is Panama considered a tax haven?

    The Republic of Panama is considered one of the most well-established pure tax havens in the Caribbean due to extensive legislation ... Read Full Answer >>
Related Articles
  1. Retirement

    How to Decide Where to Live in Retirement

    Here's a guide to help you decide where you want to live after retirement.
  2. Retirement

    5 Best Cruise Lines for a Recent Retiree

    The best cruise lines plan everything for you – the food, the entertainment and the itinerary. But pick a line with a compatible program and people.
  3. Investing

    Estate Planning for Singles

    Now that singles dominate the population, it's important they understand the essentials of estate planning for indivdiuals.
  4. Investing

    5 Ways to Reduce Your Taxes After a Windfall Gain

    Windfall income is a welcome padding to any bank account, but plan for the government's share before you start spending.
  5. Retirement

    How Are 401(k) Withdrawals Taxed for Nonresidents?

    As a U.S. nonresident, deciding what to do with your 401(k) after you return home comes down to which tax penalties, if any, you're willing to incur.
  6. Retirement

    The 5 Best Retirement Communities in Asheville, N.C

    Learn about some of Asheville, North Carolina's best retirement communities and discover why the area is such a popular retirement destination.
  7. Taxes

    Here's How to Deduct Your Stock Losses From Your Tax Bill

    Learn the proper procedure for deducting stock investing losses, and get some tips on how to strategically take losses to lower your income tax bill.
  8. Retirement

    Why Are Annuities Important for Retirement?

    Understand how annuities work, and identify the benefits they provide for retirement, the most salient being a guaranteed income stream for life.
  9. Retirement

    What Does It Cost to Retire in Belize?

    Find out how much monthly income you need to retire comfortably in Belize, a subtropical paradise with jungle landscapes, white beaches and crystal blue water.
  10. Savings

    Become Your Own Financial Advisor

    If you have some financial know-how, you don’t have to hire someone to advise you on investments. This tutorial will help you set goals – and get started.
  1. Qualified Longevity Annuity Contract

    A Qualified Longevity Annuity Contract (QLAC) is a deferred annuity ...
  2. Wealth Management

    A high-level professional service that combines financial/investment ...
  3. See-Through Trust

    A trust that is treated as the beneficiary of an individual retirement ...
  4. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  5. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  6. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!